General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsUSA Today Headline "Falling Oil Prices Threaten Recovery"...
So bottom line when Wall St loses money it's a problem and the stock market takes a dive but when gas prices are high it's ok and only the American People are hurt but the stock market is happy.
Odin2005
(53,521 posts)Jackpine Radical
(45,274 posts)(I read that somewhere, but it makes total sense.)
That will put a few extra bucks in consumer pockets, which will in turn result in an uptick in retail sales.
Rex
(65,616 posts)That little bump in the road? THAT was a recovery? Oh right, stocks...sorry...thinking like a little person. Dammit I hope gas goes up to 7 dollars a gallon! I can't stand knowing someone might not be able to afford a 4 mega yacht this year!
Fred Sanders
(23,946 posts)Energy accounts for 2% of GDP, the only thing being threatened are oil baron profits and media and political lackeys losing power and profit.
quaker bill
(8,224 posts)Fracking is pricey oil and gas. A very large amount of money has been loaned and invested to develop these wells. US companies will start to default on loans if oil prices continue to drop because the wells do not produce much oil quickly, and some don't produce for very long either. Low prices mean small $ per month and a smaller total $ produced per well when it runs +/- dry.
In short, it is an asset bubble at these prices that is about to pop, and the Saudi's hold the pointy object to pop it. In short they can make money at $40, whereas we will go broke. Pump baby pump beats the heck out of drill baby drill.
Now if some of these oil companies start going broke, many jobs will be lost, and yes that will impact the recovery.
I like saving 10 or 20 bucks a week. That said, I am really quite sure that none of this is being done for my benefit. The Saudi's have done this before to reduce competition, and there is nothing new going on here.
global1
(25,248 posts)cause the price of oil will go back up so they can recover their investment. They win both ways and we take it in the butt.
If these are supposed to be financial geniuses couldn't they predict what is happening now would happen?
We'll wind up paying. How soon do you predict the price of oil will go back up so that the Banksters don't lose - the oil companies don't lose - and the Saudi's don't lose.
quaker bill
(8,224 posts)that is the point. Their oil produces very cheaply. They can make money at prices that will drive US producers to go broke or cap wells.
I think we are good for about a year or so of low prices. Once the low prices take the incentive out of drilling and that industry begins to contract heavily, the Saudi's will cut production to make prices rise.
NPR had a great interview with a guy who owns 6 or 8 US "stripper wells". These are wells that once produced much more oil, but now can be pumped at a rate of 2 barrels a day. His costs to extract and ship for the 2 barrels a day per well was north of $70 a barrel. At $100 a barrel, he was making good money. At $60 a barrel he is better off capping them.
They have done this before, several times.
No, what I am saying is that you have been bent over for a long time. The observation that for the moment no one is taking advantage does not mean you have changed position.
daredtowork
(3,732 posts)...and those jobs should be moved over to other sorts of non-oil-dependent energy anyway...
Then couldn't we go back to enjoying the cheap enjoy, and using the savings to invest in looking for alternative energy so we won't have to feel dependent on oil in the future?
quaker bill
(8,224 posts)Solar and wind are competitive at $100 a barrel. At those prices the market takes care of things, because people will invest in cheaper alternatives.
However at $60 or less a barrel, market forces bend to buying more oil. The market forces still work but in the undesired direction.
So who is going to "move jobs"?
If market forces don't "move jobs", then the only other actor out there of sufficient scale is government. The congress we just elected is not "moving jobs" anywhere, they reject on principle that they could or should.
bhikkhu
(10,716 posts)How many remember early 2008 when oil prices were approaching $80, and all the economists debated how that could destroy global economic growth? Problems either way, but the "invisible hand" isn't going to stop giving, and taking, regardless.